Top 10 Product Sourcing Tips
Suppliers and vendors are highly essential to the growth of any business but finding a reliable one, especially in the case of start-ups, poses a number of challenges. Fortunately, there is no lack of good and trustworthy suppliers out there. You just need to do research and know what to look for in prospective suppliers. Here are some important tips on how to start looking, what factors to consider, and how to start sourcing goods profitably.
1.Choose the type of supplier that best suits your business. Suppliers can be manufacturers, distributors/wholesalers, independent craftspeople, import sources, dropshippers, closeouts, or any combination of these. Partnership with each kind has its pros and cons; do your best to know the differences and then make a choice.For instance, manufacturers offer the lowest prices while wholesalers can supply retailers with small orders and products from a variety of manufacturers. For exclusive distribution of specialty products, go to independent craftspeople, a lot of whom sell through trade shows or representatives. Retailers may also opt to buy foreign products from a domestic importer or can visit suppliers abroad to directly buy the goods.
2.Do a market analysis. If you are getting into any type of business, a supplier market analysis will help you get in a better position to familiarize yourself with the entire purchasing life cycle before you start negotiating prior to a purchase. A complete analysis may include cost data collection, previous experience, price variance, and product quality, as well as material market analysis and macro-economic situations.
3.Be diligent in research. Some buyers have made some mistakes when they were looking for suppliers and chances are a lot of them would be more than happy to help others not to make the same mistakes. Talk to more experienced buyers in a number of wholesale forums online such as WholesaleForum.com and the Wholesale Supplier Directoryon WebCosmo. In doing your research, it also helps to check a company’s BBB rating and registration with the state secretary. Google can also be extremely helpful in finding customer feedback on a specific supplier.Researching would also involve familiarizing yourself with current tariffs and trade costs, shipping details, and whether or not a specific product can be imported into your country. Better to be well-informed than to pay the price later on.
4.Develop a strong budget and sourcing plan. Where sourcing is involved, it is vital to be prepared for each stage of the supply chain life cycle and possible risks. Be wise in budgeting and planning logistics in the event where there might be last-minute changes or orders. Understand the fee structure and shipping details offered by each prospect.
5.Invite suppliers to bid. Exploring options gets easier by having suppliers come to you. Send out invitations to bid for services promotes competition among prospective suppliers and lets you choose one that suits your needs and your budgets. If you are a TopTenWholesale.com member, you can post a request for quotes and hundreds of suppliers may be able to contact you directly and instantly. Study all your options before making a final decision.
6.Perform on-site visual inspections. If you have the means, visit the production sites of prospective suppliers and meet them face to face. Take inspectors who are professionally trained to conduct key quality checks with you, more especially if your prospects are located abroad. There is also much to be said about actually “knowing” the people you do business with as they are more likely to go the extra mile to ensure that you are completely satisfied. If physical visitations are not immediately possibly, try asking your prospects for product samples.
7.Have a backup plan. Choose a backup supplier in the event that your original choice faces production or delivery problems in the unforeseen future. This would ensure that your operations would run smoothly at any given time.
8.Review your purchase order. Take time to sit down with the supplier you chose and review your purchase order as well as all agreement clauses. You guard your investment by making sure that the products you receive are exact to your specifications. It is also important that you conduct periodic monitoring and quality control inspections of contracted goods.
9.Be the customer you would want to sell to. Manufacturers and distributors are more likely to take you seriously if you have a business license or a sales tax ID. The certificate tells your seller that taxes will be collected from your customers and paid to tax authorities. Negotiate fairly, firmly, and with patience.
10.Attend trade shows. While it is so very easy to look for a supplier online, actually attending trade fairs offers enormous rewards. Major trade shows like Sourcing at MAGIC, ASD Trade Shows, Off Price, and the National Hardware Show are just one of the many sourcing events where you are given the opportunity to find the right sourcing company for your business and establish a business network.
Source: Top Ten Wholesale